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Unified Patent Court - 22 June 2016

The new Unified Patent Court will have exclusive jurisdiction over Unitary Patents and, in the longer term, all traditional European patents. The Court will provide judgments having effect throughout the EU member states participating in the Unified Patent Court agreement. Key features of the new Court are outlined below.

Why is the Unified Patent Court being created?

The Unified Patent Court (UPC) will enable a patentee to bring a single action in respect of all participating EU member states and potentially also obtain a pan-European injunction. This compares favourably with the existing system, under which a patent proprietor must enforce a European patent separately in the national courts of individual countries throughout Europe. As well as encountering differing court procedures in the various countries, a patentee may also be faced with different infringement and/or validity outcomes in the different countries, even in relation to the same European patent. This can lead to a significant degree of uncertainty, which will be reduced under the operation of the UPC. However, it will also be possible to invalidate a patent throughout all of the participating EU member states in a single revocation action at the UPC.

Which patent matters will be heard in the Unified Patent Court?

Once it becomes operational, the UPC will have jurisdiction over all traditional European patents, not just Unitary Patents. However, during a transitional period of 7 years, patent owners will have the opportunity to ‘opt-out’ their traditional European patents from the jurisdiction of the UPC, in which case they will remain under the jurisdiction of the national courts in each country, as at present. Any Unitary Patents will automatically fall under the jurisdiction of the UPC, and cannot be opted out. During the life of an ‘opted-out’ patent, the patentee will also be able to opt the patent back in if they choose to. There is a provision in the legislation for the 7 year transitional period, during which ‘opting out’ is possible, to be extended.

Patent proprietors will need to decide whether to allow their European patents to fall under the jurisdiction of the new and untested UPC, or whether to opt out and continue to have infringement and validity matters heard in the established national courts. There were initially plans for an opt-out fee to be payable for each European patent that is opted out of the system, which was a concern particularly for owners of large patent portfolios. However, it has now been announced that there will be no fee for opting-out a patent, or for opting a patent back in to the system.

Where will the Unified Patent Court be located?

The UPC will be made up of Central, Local and Regional Divisions. The Central Division will hear applications for revocation and declarations of non-infringement, and cases will be divided between three different locations depending on technology area. Broadly speaking, cases relating to the fields of chemistry, pharmaceuticals and biotechnology will be heard in London; mechanical engineering cases will be heard in Munich; and the Paris branch will deal with other technologies including electrical and computing technologies. The UKIPO announced in August 2015 that the London section of the Central Division and the UK Local Division will be located in Aldgate Tower in Central London – see further information here.

Participating member states will be able to either set up a Local Division, or join with one or more other countries to form a Regional Division. Infringement actions will generally be heard at the Local or Regional Division where an infringement occurs, or where the defendant is based, and will usually also hear counterclaims for revocation in infringement actions, although these may be referred to the Central Division in some cases.

Certain countries may form more than one Local Division, depending on the expected volume of cases. Germany, for example, will have four Local Divisions (in Düsseldorf, Hamburg, Munich and Mannheim). Most Regional Divisions have not yet been finalised, although a Nordic-Baltic Regional Division consisting of Estonia, Latvia, Lithuania and Sweden has been announced, to be located in Stockholm.

A Court of Appeal will be based in Luxembourg.

What will be the effect of a revocation action in the Unified Patent Court?

Where a Unitary Patent is revoked by the UPC, the patent will cease to have effect throughout the countries participating in the Unitary Patent system. However, it is also important to note that a European patent revoked by the UPC will also be automatically revoked in any other European countries which are participating states of the UPC Agreement. This effect can only be avoided during the 7 year transitional period by opting out a European patent from the jurisdiction of the UPC, in which case revocation of the European patent will continue to be handled independently by the national courts.

Conclusions

The Unified Patent Court will provide centralised enforcement and revocation of both Unitary Patents and traditional European patents, which may provide cost effective Europe-wide litigation. Patent proprietors who are cautious about entrusting their patents to the new court system will have the opportunity to opt out their European patents during the early stages, for no additional cost.

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